Exide EMEA bought by lenders, but still up for sale
Following news that Exide Technologies entered Chapter 11 bankruptcy protection on 19 May 2020, Exide has been bought by long-term lenders who have injected cash, but remains up for sale until the end of July. Specifically, the new owners of Exide EMEA and Asia-Pacific are subject to conditions outlined in the transaction document to “maintain continued employment of the company’s workforce in these regions”. For example, as part of the agreement, the ad hoc lender group has provided additional liquidity of up to $75 million. The agreement also includes a “go-shop” period with a bid submission deadline and auction to be held in early July 2020.
Indeed, Exide’s headquarters is filing a motion to initiate a competitive bidding process under Section 363 of the Bankruptcy Code, designed to achieve “the highest or otherwise best offers”, for the North American, EMEA, and Asia-Pacific businesses. Therefore, while Exide’s long-term lenders currently own Exide EMEA and Asia-Pacific, there is nothing to stop them being snapped up by a bigger bidder.
“We have been steadily growing revenue and market share in EMEA and Asia-Pacific over the past few years,” said Vargo continued, adding: “As our lenders have learned more about this business, they were impressed by its growth trajectory, loyal customer base, and talented employees. Their increased support reflects their confidence in our capability to deliver consistent growth and profitability by bringing to market innovative technologies for energy storage across each business segment to benefit our customers. We are pleased to have found a new owner that is committed to supporting the next phase of growth of our business in these regions.”
Vargo concluded: “The EMEA and Asia-Pacific business entered the current crisis in good financial health, and we have acted prudently throughout and, in some cases, have drawn on the support mechanisms made available by governments to mitigate the impact of the crisis and associated lockdown. The additional funding provided as part of this agreement will ensure that this business will emerge from the current crisis even stronger.”
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